Demand and scarcity in parking

It’s a pretty basic rule of economics: if there is a high demand for your service, you can charge more for that service. A related, but, not exactly converse theory, is: if demand is low, reduce inventory to create scarcity.

Disneyland just made a move that shows its understanding of the first rule. It has raised its prices for regular tickets, season passholders and parking. People flock to Disneyland like it’s Mecca, and Disneyland leadership knows people will pay just about any price to get into the park. They can raise prices pretty high before people give up on the fairytale. Read the article here.

The diamond industry does a good job with the second rule. I’ve read the inventory of diamonds is controlled very strictly to create an illusion of rarity which supports high prices. If all the diamonds in the world were actually on the market, we’d be throwing them away when they got a little dirty.

Parking is a little more complicated than some industries, but the principles can still be applied.